Malaysian Tycoon Denies Allegations over Aussie Scandal

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Mulpha’s Lee Seng Huang refuted claims that he ripped off Australian retirees and says retirement village complaints were exaggerated.

In the exposé aired on Monday, alleged victims claimed:

  • Aveo’s motto is “bleed them dry until they die”
  • Aveo evicted residents to get their “freehold (homes) and exit fees”
  • Moving out was like “getting out of prison”

Lee Seng Huang is the executive chairman of Mulpha International Bhd, which the Lee family controls. Mulpha is Malaysia’s largest real estate investor and developer in Australia.

Jessica Hromas

Lee, 42, is also a non-executive chairman of Aveo, which Mulpha has a 22.6 percent stake worth RM1.301 billion.

A joint investigation by Australian publishing house Fairfax Media and ABC’s Four Corners, a current affairs documentary programme, into Aveo – Australia’s largest retirement village operator – claimed that the company exploited its retirement village residents.

https://www.youtube.com/watch?v=Lig3FtGCvzc

Lee has refuted the allegations.

“Aveo runs a very large and complex operation with more than 2,000 staff, across 89 villages, covering over 13,000 residents,” Lee said when contacted by The Star yesterday.

“To take a few complaint cases and blow it out of proportion makes a great story but unfortunately, it is very unfair to our dedicated team that is doing the best it can in offering the highest levels of care to the Aveo residents,” he said.

The series of articles and video documentary by the media featured interviews with a number of current and former residents, their families, former Aveo employees, lawyers and lobby groups, revealed some questionable business practices.

Claims included misleading marketing promises and extortionate practices resulting in financial losses to the retirees.

Lee, however, said: “When we were questioned on these cases prior to the story, the company released a 19-page answer to address the alleged complaints point by point. This has been released to the ASX (Australian Securities Exchange). This was largely ignored by the programme.”

“Each complaint that was aired had a specific set of circumstances surrounding them that resulted in the outcome. It is not systemic of the business and we do not exploit our residents.

“Again objectively speaking, if you look at our resident surveys and customer satisfaction scores, they paint a very different picture from that which was portrayed by the TV programme,” he said.

He added that all Aveo’s residents and potential residents are given a choice as well as a 120-day cooling off period to decide whether the lifestyle at the retirement village is for them.

“There are no restrictions or cost on them should they decide not to stay at one of our villages. How is that exploiting them?” he asked.

Then again, the exposé by Fairfax Media and Four Corners is compelling.

In the Four Corners programme on Monday night, Gwyneth Jones, 77, joined a chorus of residents who hit out at Aveo. She made the startling claim that the motto of Aveo is “bleed them dry until they die”.

ABC

The programme reported that Jones was going to be evicted from the retirement village because “she is difficult and also the company wanted her freehold and exit fees”.

The company denied the allegation, saying in a statement that “Aveo has continued to listen to and attempt to address this resident’s concerns, while also managing serious counter allegations from other residents”.

Another Aveo resident, John Hayto, claimed he was left lying on the floor of his unit for five days after he fell to the ground. Apparently, a worried friend called the facility’s reception, saying that he was concerned about Hayto’s well-being and asked for them to check on him.

“He left his phone number with them and they said they’d ring him back,” Hayto said.

ABC

“That never happened. The fact is that they were communicated to and they didn’t carry out what they should have done, is to come down and check me out physically,” he said.

Aveo’s response was, “Based on the minimal details provided, Aveo cannot identify any records of such an incident.”

Resident Monica Johnson said, “Some of the people who have moved out say it’s like getting out of prison. That’s a common thing to say.”

The Sydney Morning Herald reported that since the scandal broke, “uncovering extensive fee gouging, churn, complex contracts and misleading advertising that has left many residents feeling ‘trapped’ and in a ‘financial sinkhole’, Aveo has refused to apologise or review the thousands of existing contracts.

Aveo and Lee are now said to be under scrutiny by the Australian authorities.

According to Australian newspaper The Age, Aveo has launched a buyback of 9% of just under RM640 million of the company’s stock on a one-for-one basis.

The report quoted a stockbroker who called the move “the reaction of a company under siege”.

Australian politicians are also urging the government to review the retirement village sector in the country.

Former Australian Competition and Consumer Commission chairman Allan Fels told The Age that “vigorous” action was needed to clean up the sector which had “fallen through the regulatory cracks”.

Alex Ellinghausen